Never Let a Good Crisis Go to Waste

Here’s a not-so-bold prediction: Congress will vote to spend more money today than it will cut over 10 years from any grand deal.

Later today, the House will consider the additional $50 billion in Sandy aid in two parts (they already passed another $9.7 billion two weeks ago). The House will first try to pass a bill (H.R. 152) to provide about $17 billion to address the ‘more immediate’ recovery needs, including money for FEMA’s disaster relief fund. Sandy has caused the fund’s balance to drop to $3.94 billion as of Dec. 31, from more than $7 billion on Oct. 1. There are no significant reforms in this bill to ensure that we don’t continue throwing money down a rat hole. Moreover, in addition to the FEMA money, this bill contains more funding for the failed Head Start program, as if that is critical for Sandy relief.

So how much of this package – the more immediate needs – will be expended beyond FY 2015? 51%

Then the House will consider an amendment, sponsored by Rep. Rodney Frelinghuysen (R-N.J.), which will include a $33.7 billion long-term package, containing much of the extraneous spending that passed the Senate. $12.2 billion is for the Community Development Block Grant, which is nothing more than a multi-purpose account for states to use on any project. Why not use a disaster to promote HUD special interest activities?

80% of the spending in this bill will occur after FY 2015.

Conservatives offered numerous amendments that would have limited the scope of the bill to necessary and immediate disaster spending, offset all new spending, and provided measures for FEMA. Rep. Mick Mulvaney (R-SC) proposed an amendment that would have offset the $17 billion package by eliminating direct subsidies to farmers, outstanding TARP spending, and transit subsidies for federal employees. Rep. Tom McClintock proposed an amendment that would have eliminated all long-term funding that does not deal with the immediate disaster.

Unfortunately, the Rules Committee, which serves as a conduit for leadership, blocked most of these amendments (sounds like Harry Reid in the Senate) in order to shield their members from tough votes. Overall, the amendments that were made in order would only cut a total of $200 million from the package. As for offsets, they did make one amendment in order – a Mulvaney amendment to offset the $17 billion cost with a 1.63% cut in all discretionary accounts. I have a sneaking suspicion that a number of members will vote for the Mulvaney amendment, and when it fails, proceed to vote for the underlying bill – without offsets.

A crisis should not be used as an opportunity to play on people’s emotions for the purpose of perpetuating bad public policy. If we don’t reform these programs now to include more privatization and state control where there will be more local accountability, we will continue down the same path with every future natural disaster.

And remember this: Congress will spend more money today than all of the new annual revenue projected to flow in to the Treasury as a result of the Obama/McConnell tax hikes